Are Income Property Profits Lawful If Part of the Initial Investment Money Was Obtained Unlawfully?

Question

When I was 16 and misguided, I ran a business where I sold a product and exaggerated its condition/quality, thereby deceiving a buyer. This occurred on most of the profits. A few years later, I took this money and purchased two income properties and then stopped the business.

When I returned to Islam three years later, I felt more guilt and learned that riba-based mortgages are haram, so I sold one property and used the profits to pay off the other outright. Now I rent it out. Is this income halal? I am perturbed that this income and the increasing equity in the home are not lawful because part of the initial investment money was not lawfully obtained.

Please help me clean my slate with Allah.

Answer

In the Name of Allah, the Most Merciful and Compassionate.

May Allah alleviate our difficulties and guide us to what pleases Him. Amin.

Firstly, I commend you for seeking guidance and wanting to rectify your past mistakes. May Allah bless you for your sincerity and guide you toward what is good.

Based on your information, it appears that you have sinned by deceiving the buyer and earning profits through dishonesty. However, since you have repented and taken steps to rectify your mistake by selling one property and using the profits to pay off the other outright, you have shown remorse and taken action to make things right.

The Ongoing Rental Income

Regarding the income from the remaining property you are renting out, it would be considered halal if the rental income is lawful and riba is not involved in the transaction. Additionally, the increasing equity in the home would be halal since it results from lawful rental income. [Nawawi, al-Majmu‘]

Making Amends

It is important to note that any income earned through unlawful means must be returned to its rightful owner or donated to charity. If you have not already done so, you should seek to make amends by compensating the deceived buyer. [Ibid.]

In conclusion, it is commendable that you have taken steps to rectify your past mistakes and ensure that your current income is halal. May Allah accept your repentance and bless you with success in all your endeavors.

I pray this is of benefit and that Allah guides us all.
[Shaykh] Irshaad Sedick
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Irshaad Sedick was raised in South Africa in a traditional Muslim family. He graduated from Dar al-Ulum al-Arabiyyah al-Islamiyyah in Strand, Western Cape, under the guidance of the late world-renowned scholar Shaykh Taha Karaan.

Shaykh Irshaad received Ijaza from many luminaries of the Islamic world, including Shaykh Taha Karaan, Mawlana Yusuf Karaan, and Mawlana Abdul Hafeez Makki, among others.

He is the author of the text “The Musnad of Ahmad ibn Hanbal: A Hujjah or not?” He has served as the Director of the Discover Islam Centre and Al Jeem Foundation. For the last five years till present, he has served as the Khatib of Masjid Ar-Rashideen, Mowbray, Cape Town.

Shaykh Irshaad has thirteen years of teaching experience at some of the leading Islamic institutes in Cape Town). He is currently building an Islamic online learning and media platform called ‘Isnad Academy’ and has completed his Master’s degree in the study of Islam at the University of Johannesburg. He has a keen interest in healthy living and fitness.